I think its only for people who have been locked into a hotel room either by full pre payment who would incur large cancellation fees or a room deal where no changes can be made with no refunds.
Interestingly on the deal I got, the original itinerary booked said there were no changes allowed and if changes or cancellations made you would lose all the payment.
But roomer managed to change the name, this is why I think they must have an agreement in place with hotel chains worldwide where they are allowed to make name changes.